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Extreme Winter Weather Impacting Propane Supply and Prices

BY LEANN DILBECK –

With some published reports saying this will be the coldest winter of this century thus far, the wide-spread, prolonged and brutal cold that has blanketed much of the country has caused propane shortages and price increases. Last week, locally, propane jumped an average of $.60 per gallon in just one week to $3.40, which compares to $4.30 nationally.

Arkansas is among 24 other states in the nation whose governors have signed emergency clauses to suspend all interstate regulations to ease transportation issues.

The concern of shortages spurred State Representative Nate Bell to meet with Governor Mike Beebe last Friday, January 24. “I met with Governor Beebe this morning [Friday] to discuss the burgeoning crisis in propane availability and cost. Prices this weekend are near $5/gallon in parts of Arkansas when available at all. I asked the Governor to take every possible executive action to mitigate the emergency situation including full utilization of emergency powers regarding emergency delivery to tanks owned by other companies, etc.”

Bell said that he met with Beebe again Monday and expects to meet with him and members of his staff again later in the week as they continue to monitor the current situation. He commended the leadership Beebe has shown on a national level in addressing this potential crisis and protecting the citizens of Arkansas.

Bell is also collaborating with U.S. Congressman Tom Cotton to identify any federal regulations that could be suspended to speed propane manufacturing.

Bell described what he called the ingredients of a “perfect storm” in contributing to the propane shortage. He explained that this year’s corn crop was abnormally large and very high in moisture and therefore, it required higher propane usage to dry it out. “Manufacturing is never able to maintain the demand for propane during an average winter so they rely heavily on reserves. With the high corn crop, reserves were tapped before this hard winter ever even hit,” Bell said.

With much of the nation being hard hit with extreme winter weather, propane utilization is dramatically higher than usual and according to Bell, most of the reserves have been depleted putting an incredible demand on propane manufacturers.

“Don’t misunderstand. I don’t fear that the shortage is such that we won’t have enough to heat people’s homes but if not addressed, it could escalate and become an issue of having an adequate supply to accommodate commercial and farming needs. This shortage could have a significant economic impact but it is hard to say at this point because so much is depending on the weather.”

Some states, such as Georgia, said Bell have begun rationing and when choosing between heating homes or farms, have restricted delivery to residential homes only.

Besides the supply, the rising prices will also be a concern for residents and farmers alike as another forecasted arctic front moves in this week.  Bell said if the extreme weather conditions across the nation continue he foresees proposals for state aid developing.

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